The End of Marketing

October 7, 2009 by Robert Kozinets.

The National Post’s Editor invited me to submit an article for publication in Canada’s national newspaper and, during the writing, the topic kind of shifted radically. I started thinking about what marketing’s present and especially its future would look like. Paul Pivato, of Magna International, and also Schulich’s media outreach specialist, was instrumental in encouraging me to develop my ideas a bit further.

The finished article is available online here.

We’re going to be blogging about it soon in a live chat that the National Post has set up.

I’m also putting up an earlier, extended version of the article here for you to check out. There are many ideas here that I am still developing, but it is pretty clear to me that we may need to start thinking about what a post-marketing age might look like.

The End of “Marketing”

It brings me no great joy to say it. But, as a marketing professor, a consultant, and a marketing researcher, I have had a fairly good vantage point from which to observe the slow demise of the field of marketing.

Marketing is dying. And by marketing, I mean that managerial discipline and area that devotes itself to understanding consumer needs, guiding the building of products and services to fulfill them, managing channels, and communicating and enticing consumers to buy.

But that is not what most of today’s marketers do. Instead, today’s marketers have been increasingly boxed in. Marketing has come to mean “marketing communications,” the broadcasting of commercial and promotional information. Marketers are the media folk. The writers of pamphlet copy copy, liaisons with ad agencies and media buyers, buyers of the occasional focus group, and planners of tradeshows. Perhaps they work with sales people. Perhaps they even are the salespeople. Sales and advertising, advertising and sales—this is what so much of modern, everyday marketing has become.

What happened? How did the mighty marketer– still the center of such consumer packaged goods titans as Procter & Gamble, Unilever, and Kraft– get so constrained?

We can blame managment. Marketing strategy– the segmentation, targeting, and careful positioning of promotional and advertising messages– has been the very core and key of what differentiates marketing from other fields. But, gradually, these techniques have been so successful that they been appropriated by general managers and management fields.

Fulfilling your customer? That’s not the job of marketers, that’s the job of all managers in organization, as Peter Drucker reminded us over a half century ago. Knowing your customer? That careful segmentation, that deliberate decision-making around the choice of target: that is now the terrain of the C-Suite and the Executive VPs.

We can blame design. Thanks to the success of design-oriented firms like Apple and IDEO, design as a field is gaining in prominence and popularity. But some of the so-called “design thinking” rebottles old marketing wisdom in shiny new ‘design-labeled’ bottles. User-oriented design used to be called customer centered product development. User-oriented research uses many of the same ethnographic and qualitative methods established in marketing research since the 1960s. Designers, along with R&D, product planning and other technology experts, have taken marketing’s chair at the innovation table.

We can blame the Internet. Thanks to the Internet, my Chicago Cubs online forum, my social media marketers Twitter feed, my friends and family Facebook group, my list of ten favorite bloggers and my digg newsfeed have more sway over my attention, and probably my purchase decisions, than the marketer’s purchased and obviously biased advertising. Consumers are increasingly making their consumption decisions after consulting with other consumers through online communities. Want to see a movie? Check the ratings and comments on rottentomatoes.com. Want to buy a new computer? Check the online forums to see if anyone reports any problems. A car? Don’t even think of buying it before you check the online forums for hot tips.

In the new world of digital word-of-mouth, marketers become just one voice among many, their broadcast megaphone removed, their once omnipresent shouting and flash power overwhelmed by consumer groups’ ability to create, filter, siphon, direct, communicate, legitimate, authenticate, transform, and debate all manner of text, image, and video information relating to whatever might tickle their collective fancy.

So where does that leave marketers? In a tight spot, for certain. Undervalued. Unappreciated. Unacknowledged for all that they have to offer. Relegated to the outmoded modes of advertising and sales, marketers’ cart is hitched to two dying breeds.

But where does that leave marketing? Ah, there’s the paradox. Because the essence of marketing has never been more vital, more valuable, or more alive. Relegated to outmoded modes of advertising and sales, the modern marketers’ cart is hitched to two dying breeds.

The walls that once separated marketers and consumers are crumbling. And marketing is the one field set up perfectly with the tools to help general managers understand and cope with this completely new reality.

Consumers are gaining power. Information exchanges between consumers and other consumers, as well as between companies and their consumers, are becoming more frequent. They are growing in depth and scope. The veneer of artificial and inauthentic “marketing”–the plastic portrayal of happy consumers happily consuming brands– is being peeled away, word by word, bit by bit.

What will be left when the wall is finished crumbling will be empowered consumers and surprised managers standing face-to-face, staring at each other. At that point, which we are quickly approaching, real understanding will be vital. In this bold new world where the obfuscating curtain has been pulled back, managers who take to heart marketing’s core principles, strategies, research techniques and methodologies, who understand brands and management, will have a distinct advantage.

Marketing will die. But, in its place, an exciting new field of consumer-centric management will be born. All managers will need to be marketers in thought and deed, astutely measuring and communicating with consumers on a day-to-day and even moment-to-moment basis.

Marketing and marketers will need to permeate the company as new, open, organizational structures, based upon cultural contexts, consumer segments and trends are found more nimble and effective than old silos and brand-based management. They will employ consumer-understanding specialists, as chipmaker Intel Corp. does with its now-well-established User Experience group, staffed by eight consumer anthropologists.

Consumer-centric managers will begin to develop and distribute intelligent new analytical tools, such as Palo Alto’s Netbase, keeping managers on top of the millions of word-of-mouth conversations flowing around the Internet.

These managers will provide continually refreshing yet powerfully branded platforms for a constantly changing and customizable array of consumer-oriented tools. Just looks at what Apple’s App Store or its iTunes offerings, or Google’s Android are building. Over time, these stacked platforms are incredibly difficult to compete against.

Consumer-centric managers will adopt transparency management and crowd-sourcing models like those of skinnyCorp and its Threadless T-shirts, or Etsy and its creative community, to bring the corporation into closer alignment with the power of consumer tribes. They will be insiders who also work outside, community members who communicate and build social value in ever-expanding and collaborative social media networks.

The perspective-previously-known-as-’Marketing’ will move from an emphasis on internally defined segments to those defined by the consumers themselves. Who are we? We’re beer geeks, okay? We spend hours a day and thousands of dollars brewing our own home brews. And that’s how we want to be addressed from now on.

With an ever-expanding array of tools, techniques, and feedback mechanisms to endlessly deepen their understanding of, and communication with consumer groups such as the beer geeks, as they do business with them, microsocial-managers will arrive at the point where the inside and outsides of the company will become completely blurred.

Who speaks to the community online? Who communicates to the ever-expanding, ever-important networks of social media? Who handles the job of understanding and interacting with the omnipresent consumer of the business’s products and services? The consumer-centric manager, that’s who.

The Post-marketing field of ‘Marketing’ will move towards a more holistic view of the product or service, capable of handling every aspect of its development and continual refinement, from cradle to grave.

Evangelical managers and their Chief Ethnographic Officers will pioneer and champion new technologies and approaches, test them, visualize consumers’ intertwining consumption patterns, then plan every aspect of the product’s communal release and communication into a complex of local, regional and global cultural, political and economic environments — cutting to the very soul of The New Marketing.

And so, emerging from the still-hot embers of marketing’s implosion will be a brilliant new age of consumer-centric management.  I don’t know about you, Gentle Brandthroposophy Readers, but I can hardly wait for it to get here.

Posted in Economy and General Business Management, Social Media, Social Media Marketing, Conferences & Presentation, Netnography, Marketing News & Insights, Communities and Tribes, Word of Mouth Marketing, Branding | No Comments »

Join Me Online for The SmartShift Live Forum

October 6, 2009 by Robert Kozinets.

The Editor of Canada’s National Post recently asked me to write a feature. I promised them an article on social media, but once I started writing, it turned into something else. I had no choice, really. I call it “The End of Marketing.” It’s both dark and hopeful. I hope you like it.

They also invited me to discuss it in a live chat tomorrow (Wednesday October 7, 2009), with journalist Diane Francis and my Schulich colleague Eleanor Westney (who is presenting on the future of the corporation). The live chat is open to all participants. Yes, that means you!

Here is the link.

And, if that doesn’t work, just cut and paste this link: http://www.financialpost.com/executive/smart-shift/index.html

I hope to hear from you tomorrow!

Posted in Social Media, Social Media Marketing, Economy and General Business Management, Conferences & Presentation, Marketing News & Insights, Word of Mouth Marketing, Branding | No Comments »

The FTC Wants to Scare Online Liars Away from Paid Advertising– But Does This Law Mean Anything?

October 6, 2009 by Robert Kozinets.

In a long-awaited, long-anticipated ruling that surprised no one who was watching, the FTC today decided to recognize the fact that bloggers and other social media types can be celebrities, that celebrities can be social media users, and that both can be paid endorsers without being acknowledged as such online (or off). Without providing any concrete details, the new guidelines legally require bloggers to clearly disclose any “material connection” to an advertiser, including giving actual payments or free samples for an endorsement. They also hold bloggers and others responsible for telling the (gasp!) truth about their product experiences.

Truth? Online? So those Pay-per-post types who get paid for mentioning a given product or service on their blog could, theoretically, be held to task for flogging those deluxe granite countertops that they don’t actually own? What about all the people on dating sites who hang out 20 year old pictures of themselves as how they really look? Can we fine each of them eleven grand?

After consulting with a range of marketing associations, including the WOMMA, the Word of Mouth Marketing Association, the FTC drafted their brand new rules for this brave new online world. WOMMA and many of the other word of mouth firms and groups have long had a code of ethics that encouraged member companies to encourage (but not always require) that bloggers and others reveal their endorsement type connection.

But I have to wonder whether this law means anything after all?

Is it really enforceable in the online space? With some many people posting so many things about so much, who is going to monitor it? What about anonymous ranking and ratings–still the bulk of online recommendations, I’d think. And if I post something about the great new and fresh Halloween Flavor of Reese’s Peanut Butter cups, am I really going to be held to task for having tried and appreciated said yummy bits? Come on? Really? What if I just liked the sound of them? Or the color, or package? Is the FTC really interested in me that much?

And what about if I post that I hate a product? Is that automatically okay? Will this now unleash a firestorm of paid anti-blogging, where the competition can legally pay bloggers to diss every product but their own?

It’s a big scare, people. I’ll be surprised if many average people get stuck with cease and desists over this one. Maybe a few high-profile, large-scale cases, but that’ll be it. It seems pretty symbolic to me.

What do you lawyers think?

From where I stand as an online marketing researcher, something is definitely going on that prompted this action. Have no doubt about that. My student, Ron Ruslim, noted last night that positive reviews outweigh negative ones on the Internet by a ratio of 5-to-1. That’s just not realistic. And it goes against everything we know about offline word-of-mouth, where people talk a lot more about their negative, expectation-disconfirming experience than their positive ones.

Personally, I think the big perps in this space are the operators like Pay-per-post and their ilk, companies that try to get bloggers to post about products for money, or who hire shills to post falsely positive messages. Those companies, not the bloggers or individuals who get suckered by them, are the ones to go after. So why is the FTC seeming to target the little blogger instead? Are they? Maybe it’s all part of the scare.

My co-authors and I just completed a piece of research on word-of-mouth marketing that complicates this finding even more. In our study of the way that 90+ bloggers responded to a free promotional giveaway, we find that there are a number of ways that people react to the promotion. Most (but definitely not all) disclose their involvement. But the way that they do so can vary widely, and the effect on their audience base also varies widely. As a cultural phenomenon, it is considerably more complex than a simple statement of disclosure can be. Blogging is not TV or radio, where a few lines of legal disclaimer suffices. Blogging is an ongoing conversation, and (non)disclosures can happen in any of a million different ways. I”ll pass that research on to you readers in a little while.

So, while other news stories, like AdAge and YahooNews are trumpeting this as an event, you, oh Faithful Brandthroposophists now know what really happening. The FTC just wants to scare us into being a bit more careful about what we take from who, and why we do it.

But, really, this isn’t all that scary.

Posted in Social Media, Social Media Marketing, Economy and General Business Management, Word of Mouth Marketing, Marketing News & Insights, Communities and Tribes, Branding | 3 Comments »